For BlackBerry Maker, Crisis Mounts

By

Will Connors,

Ben Dummett and

Christopher Lawton

October 13, 2011

Research In Motion Ltd. scrambled to restore service to millions of BlackBerry users around the world Wednesday as the company's worst-ever outage vexed office workers, government officials, emergency responders and others who rely on the messaging device.

BlackBerry users saw further disruptions in service, the third consecutive day of problems that have now spread from Europe into Asia and North America. Spencer Ante has details on The News Hub.

The intermittent service disruptions come at a vulnerable time for RIM, which has been struggling with dwindling BlackBerry shipments as it competes with Apple Inc.'s iPhone and gadgets powered by Google Inc.'s Android software.

The disruptions in email, instant-messaging and Web browsing—which forced many BlackBerry users to resort to phone calls and faxes—affected most of the Canadian company's key markets, including North America, Europe and Asia, and a big chunk of its 70 million world-wide subscribers.

RIM has disclosed few technical details about the problem and by late Wednesday had stopped forecasting when service might be fully restored.

Plagued by Service Problems

See key dates of service disruptions for Research In Motion's BlackBerry.

In a hastily organized conference call with reporters Wednesday afternoon, RIM's chief technology officer for software, David Yach, said the company didn't see any signs of hacking or other security breaches. Several U.S. government agencies affected by the disruptions said Wednesday they were in touch with RIM about the problems, but there were no indications from officials that RIM was suffering from anything other than an internal malfunction.

RIM has blamed the problem on a hardware failure in its network infrastructure. RIM routes users' email messages and other data through its own network, which the company says makes such communication more secure. But, as the latest disruptions show, that arrangement can lead to widespread outages when RIM hits its own glitches. The company said late Tuesday it fixed the hardware problems, but expected additional delays as it worked through a "backlog" of data to users. Customers in Europe, the Mideast and Africa have suffered through intermittent outages since Monday.

RIM's Mr. Yach said on the conference call Wednesday that the company was forced to "throttle" data traffic through its world-wide servers in order to deal with the backlog, triggering fresh disruptions in previously unaffected markets, including Japan, Singapore and—starting early Wednesday morning—North America.

Service disruptions affected a wide array of U.S. federal agencies, including the Federal Reserve and the U.S. Treasury, as well as government agencies and emergency services. Officials said, however, that the outages weren't significantly disrupting routine operations.

The big risk to RIM is that the outages will drive so-far loyal BlackBerry customers to give up on the smartphone amid a series of other stumbles in recent years. Co-chief executives Jim Balsillie and Mike Lazaridis are under pressure from shareholders to turn around flagging BlackBerry shipments. Sales of the company's recent PlayBook tablet have been disappointing, and several product launches this year have been pushed back.

More

Amid all those troubles, industry watchers are closely monitoring how RIM responds to the outages.

"Expectations are very, very high right now," said Abhi Ingle, a vice president in AT&T Inc.'s business solutions group. "The slightest glitch, people notice." Mr. Ingle, in an interview at a telecom conference in California, said he couldn't comment specifically on this week's outage.

Through all its troubles, RIM has said that its overseas markets were still thriving and customer loyalty remained strong around the world. But this week's outages have triggered a wave of complaints in some of RIM's most important markets and could drive key corporate customers to consider alternatives to BlackBerry services.

"The attributes that allow [RIM] to hold on to customers are the attributes that these outages damage most drastically: reliability and the knowledge that the BlackBerry will always deliver your email in real time," said Forrester analyst Charles Golvin.

ENLARGE

Deborah Boudreau, senior director of sales at Canadian broadcaster TVA, rushed into the office earlier than usual Wednesday when she realized she couldn't send or receive emails on her BlackBerry. "It caused me huge grief," she said. "I get lots of emails prior to 9 a.m. that I can maybe act on before I get to the office and I couldn't this morning."

European companies, suffering through three days of interruptions have been forced to find other means of communicating. A handful of European executives reached Wednesday, however, said they weren't yet considering chucking their BlackBerry accounts altogether, and would give RIM more time to sort out the problem.

Deutsche Post AG spokesman Dirk Klasen said BlackBerrys are one of the company's most frequently used communication tools. He said his colleagues have resorted to using the telephone or fax machines.

ENLARGE

Research In Motion got a black eye Wednesday as a hardware glitch prolonged the company's worst ever BlackBerry outage, disrupting email service for millions of users around the world.
Natalie Keyssar for The Wall Street Journal, Zuma Press, Claudio Papapietro for The Wall Street Journal

"It's simply making people angry hanging around for hours trying to get access to their email services," he said.

The City of Houston sent out an email to all employees warning of the BlackBerry disruptions. Its IT department has been in constant contact with RIM, said Jessica Michan, spokeswoman for Houston Mayor Annise Parker. "This will cause some delays, but the city is not going to stop just because of BlackBerry issues," she said. The Houston police department said email on department BlackBerrys has gone in and out of service, but that has meant little for the average cop on the street, said HPD spokesman John Cannon.

"We dispatch over radio, and the phone and text services are still available," Mr. Cannon said.

For some, the outage was a welcome respite. Vermont's Democratic Sen. Patrick Leahy compared it to when he goes scuba diving with his wife and leaves his BlackBerry ashore. "It's been heaven," Mr. Leahy said. "My staff can't find me, nobody can reach me—only my wife, who I call all the time... I'm enjoying the peace and quiet."

Disruptions to RIM's BlackBerry service continued around the world for a third-consecutive day, with problems spreading Wednesday into the company's giant North American and Asian markets. Chip Cummins reports on Digits.

Telecom carriers offered little insight. Sprint Nextel Corp. said Wednesday it was working "aggressively" with RIM to sort out the problem, which the big U.S. carrier said started affecting customers at 7 a.m. ET. Verizon Wireless said BlackBerry voice services were still working.

A spokesman for T-Mobile said some customers using BlackBerrys are seeing service delays which RIM is working to resolve.

AT&T declined to comment.

The United Arab Emirates' two telecom operators—Emirates Telecommunications Corp. and Emirates Integrated Telecommunications Co.—said Wednesday they would compensate their BlackBerry customers for service interruptions across Europe and other parts of the world, including in the Middle East, in recent days.

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